The End Of Federal Spousal Support Tax Deduction

Divorces nationwide are about to become more complicated with the end of the federal spousal support tax deduction in 2019. As part of the federal tax code overhaul, the tax deduction for alimony payments will be eliminated at the end of the year, and unlike other altered provisions to the tax code, this change will not sundown at the end of 2025. This has the potential to drastically affect divorce negotiation, payments, and settlements across the United States, including California. 

Current Alimony Federal Tax Deduction

Under the current tax code, alimony payments – also known as spousal support – can be deducted when calculating federal taxes. The payee of spousal support payments is typically the higher earner of the divorced couple, and under the current law is able to deduct the total cost of alimony from federal taxes. The recipient of spousal support owes taxes on the amount received but is usually in a lower tax bracket than his or her former spouse.

In 2015, the Internal Revenue Service reported that 600,000 people claimed the federal deduction for alimony, and 414,420 people reported receiving alimony from their former spouses. With 827,000 couples divorced in 2016, this change in the federal tax code has the potential to affect millions of Americans.

Changes to the Spousal Support Tax Deduction

Under the new tax code provisions, the payee of spousal support payments will no longer be allowed to deduct them when calculating federal taxes. In addition, the recipients of alimony will no longer have to claim the payments received as income on their federal tax forms. This has the potential to make negotiations about spousal support far more intense during divorce proceedings because the tax break will no longer be available to the paying spouse. 

Contact Los Angeles Family Lawyer and Divorce Attorney today to discuss your Divorce or Support matter

At the Law Office of Bradley S. Sandler, we are experienced in family law and have a comprehensive knowledge of all changes in the tax code that may affect your divorce. If you are considering a divorce in the Beverly Hills area, call or contact us today.